The 2012 Aflac Workforces Report surveyed over 1,800 HR professionals and 6,151 employed adults to determine each group's priorities and beliefs regarding employee benefits. It found that there are quantifiable connections between the quality of an employer's benefits package and employee performance and retention.
Furthermore, the study found that small businesses are the least likely to communicate with employees about their benefits and the least likely to offer voluntary insurance options.
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Small business owners and HR professionals can take away an important lesson from this report: if they want to attract and keep the best talent, they need to improve their communication and broaden their employee benefits.
Employee retention, employee satisfaction, and the quality of benefits packages are inextricably linked. The study found a correlation between workers who are satisfied with their benefits package as well as with their job -- 73% of workers share those qualities.
On average, the workers who are the most satisfied with their benefits program are six times more likely to stay with their current employer.
Unfortunately for small businesses, 37% of their workers find their current benefits package only somewhat adequate, and a further 21% consider their benefits inadequate. That represents a large segment of the small business workforce (58%) that can't be expected to stay loyal to their employer.
- In general, only 33% of workers say that they are dissatisfied with their benefits but are still very satisfied with their jobs.
- 34% of workers say that benefits are extremely influential over their decision to leave an employer.
Changing your benefits package to increase employee retention can end up saving your business money, even factoring the added costs of the improved benefits. The cost of replacing a full-time employee can reach or exceed 50 percent of that individual's salary, due to lost productivity, cost of new hire training, and hiring expenses (AARP).
Responsibilities of HR
Another lesson your small business can learn from the Aflac Workforce Study is to improve your communications between HR and employees. Most small businesses don't adequately communicate with their employees regarding their benefits package; nor does their HR department understand the specific needs of their employees. Improving this conversation can help employees be more satisfied and, therefore, more loyal to the company.
- Despite considering it important to tailor benefits to their employees, only 32% of small businesses actually do so.
- Inviting employees to give feedback and indicate their preferences is an important step in creating a satisfying benefits package, yet -- again -- only 19% of small businesses take that step.
Creating an open channel of communication between your HR department and your employees can generate positive results on both sides. Small businesses are the least likely to communicate effectively with their employees, yet open communication costs nothing.
So what are the priorities of small business employees? 32% are most concerned with maintaining their health care benefits and a further 22% are dealing with the cost of their out-of-pocket expenses. Since 56% of employees consider their benefits to be extremely influential on work productivity, it is important that small businesses put their own priorities in sync with those of their employees.
- Although 60% of employees would be interested in purchasing voluntary insurance, only 19% are likely to offer these benefits.
The key takeaway from Aflac's study is to generate a discussion with your employees regarding what benefits are most important to them and most likely to garner their loyalty. You may find that the money you save by increasing employee retention can generously offset the cost of changing your benefits package to fit your employees' needs.